The taxpayer sold the client list respecting his insurance brokerage business for a stipulated dollar sale price (payable in five annual instalments) which was equal to 2.25 times the amount represented in the sales agreement to be the future annual sales commission. However, the sale agreement provided that the annual instalments would be adjusted up or down in proportion to the amount that the sales commissions earned that year exceeded or fell short of the expected annual commissions.
Favreau J. found (at para. 15):
The source of the commissions received was indeed the client list, all amounts received by the appellant, although expressed as instalments of the sale price of the client list, were dependant entirely on the use of or production from that property and were taxable under paragraph 12(1)(g) of the Act.